389 F. Supp. 3d 716
N.D. Cal.2019Background
- Plaintiff (Medicare Part D beneficiary) sought judicial review of the Medicare Appeals Council (MAC) denial of coverage for Serostim, prescribed for lipodystrophy/wasting syndrome; Envision administered Part D in 2016 and Blue Shield in 2017.
- Both Envision and Blue Shield denied Serostim as off-label (not FDA-approved or supported by a Medicare compendium); ALJ decisions denied coverage and MAC consolidated and denied the appeals (final agency decision July 12, 2018).
- Plaintiff sued Envision, Blue Shield, and the Secretary of HHS asserting: (1) administrative challenge to the MAC decision, (2) due process violation, (3) Rehabilitation Act (Section 504) discrimination, and (4) ADA Title III discrimination (latter was later withdrawn).
- Envision and Blue Shield moved to dismiss for failure to state a claim (improper defendants); DHHS moved to dismiss claims 2 and 3 for lack of subject-matter jurisdiction under 42 U.S.C. § 405(h).
- Plaintiff moved to supplement/complete the administrative record with AHFS-DI materials; DHHS lodged the administrative record (including the FDA label) and moved to file it under seal because it contains sensitive medical information.
- Court dismissed all claims against Envision and Blue Shield without leave to amend; dismissed claims 2 and 3 against DHHS for lack of subject-matter jurisdiction under § 405(h); denied plaintiff’s motions to supplement the administrative record; granted DHHS’s motion to file the administrative record under seal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Envision and Blue Shield are proper defendants in an administrative challenge to a MAC decision | The insurers were named as defendants for denials of coverage and are responsible for the coverage decision | Only the HHS Secretary is the proper defendant for judicial review of a MAC final decision under the Medicare review scheme | Envision and Blue Shield are not proper defendants; claims against them dismissed without leave to amend |
| Whether the court has jurisdiction over plaintiff’s due process and Rehabilitation Act claims (claims 2 & 3) | Claims are not essentially for benefits but challenge an unlawful "classification" denying access to Serostim and therefore fall outside § 405(h) restriction | § 405(h) channels judicial review of Medicare-related claims to § 405(g); these claims "arise under" the Medicare Act and are barred outside that scheme | Court lacks subject-matter jurisdiction over claims 2 and 3 under § 405(h); those claims dismissed without leave to amend |
| Whether the administrative record must be supplemented/completed with AHFS-DI compendia (Serostim, somatotropin) and introductory portions | Plaintiff asserts the AHFS-DI materials were considered/are necessary to review and that the record is incomplete without them | DHHS submitted certified AR (including DRUGDEX and FDA label); agency certification presumed complete and plaintiff offered no clear evidence to rebut presumption or to meet narrow exceptions for extra-record evidence | Plaintiff failed to overcome presumption of completeness and did not satisfy exceptions; motion to supplement/complete AR denied |
| Whether the administrative record should be filed under seal | Plaintiff did not oppose public filing; argued generally for access | DHHS argued the AR contains extensive sensitive medical and private information warranting sealing under the compelling-reasons standard | Court granted sealing of the AR due to strong privacy interests in medical records outweighing public access |
Key Cases Cited
- Shalala v. Illinois Council on Long Term Care, 529 U.S. 1 (1999) (§ 405(h) channels judicial review of Medicare claims to the § 405(g) process; broad bar on suits "arising under" the Medicare Act)
- Heckler v. Ringer, 466 U.S. 602 (1984) (§ 405(g) is the sole avenue for judicial review of Medicare Act claims)
- DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006) (federal courts limited to actual cases or controversies)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard under Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of Twombly plausibility standard to factual allegations)
- Kamakana v. City & County of Honolulu, 447 F.3d 1172 (9th Cir. 2006) (compelling-reasons standard for sealing judicial records)
- Do Sung Uhm v. Humana, Inc., 620 F.3d 1134 (9th Cir. 2010) (Part D judicial review is through § 405(g) framework)
- Weinberger v. Salfi, 422 U.S. 749 (1975) (§ 405(h) bars jurisdiction even for procedural challenges tied to benefits)
- Marin v. HEW, Health Care Fin. Agency, 769 F.2d 590 (9th Cir. 1985) (claims deriving from Medicare reimbursement decisions are barred by § 405(h))